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EU Minimum Excise Rates

EU-wide minimum excise rates for alcoholic beverages are laid down in a 1992 Council Directive. Accordingly, the minimum excise duty for spirits in the European Union is €550 per hectolitre of pure alcohol.  This is a minimum threshold, and many Member States levy significantly higher rates.  This is in great contrast with the minimum rates for other alcoholic beverages:  The applicable minimum rate for beer was set at €0,748 per hectolitre/degree Plato, or €1,87 per hectolitre/degree of alcohol of finished product.  EU Finance Ministers decided to set the minimum rate for wine and sparkling wine at zero.  Intermediate products, such as port, sherry and vermouth, are subject to a minimum taxation of €45 per hectolitre of product.

 

In 2006, the European Commission adopted a proposal to raise these minimum rates by 31%.  Since the ECOFIN Council of Ministers failed to reach unanimous agreement on the proposal in November 2006, the issue has not been on its agenda.  The comprehensive study on the taxation of alcoholic beverages announced during the first half of 2007 has not been produced yet.

 

The European Parliament, which has a consultative role in this dossier, rejected the Commission proposal in July 2007 and called for its withdrawal.  Since then no relevant developments have taken place.  spiritsEUROPEcontinues to monitor the situation and opposes any further tax increases on spirits, given the discriminatory levels of excise duty in comparison with other alcoholic beverages.

 

Our position

  1. Opposition to any further tax increase on spirits given the existing disproportionate levels of discrimination levied against them in comparison with other alcoholic beverages.  Any revalorisation of current minimum excise rates would deepen this discrimination further and, expressed as a percentage, automatically heightens the tax burden on spirits.
  2. Greater approximation of excise rates on alcoholic beverages across the EU, which is the European Commission's objective, cannot be achieved without the introduction of maximum rates (as the experience of the past 15 years under the current Council Directive has shown).
  3. The Commission's proposal ignores the notion of substitutability among alcoholic beverages and refuses to acknowledge the longstanding EU spirits industry view - and logical proposition - of taxing all alcoholic beverages at the same rate of excise by degree of alcohol.
  4. The ECOFIN Council Conclusions of April 2005 stated that 'the vast majority of Member States do not consider that health and social aspects should be a major determinant in setting rates', yet this is overlooked in the Commission's proposal. It is disappointing that references to increased taxation as a means of combating alcohol misuse are mentioned in the proposal.

Related links:

 

Council Directive 92/84/EEC of 19 October 1992 on the approximation of the rates of excise duty on alcohol and alcoholic beverages